Leavrage Analysis between traditional and Sharia-compliant institutions comparative study
the case of Malaysia
Keywords:
Financial leverage, Traditional institutions, Shari'ah-compliant institutions, cost of Islamic financing modes, degree of indebtedness
Abstract
Firms rely on leverage to maximize the return for the owners against minor changes in the level of profits, through relying on borrowing to finance their activities.
On the other hand, Shari'ah compliant institutions avoid Reba-based loans and rely on alternative Financing Modes with different costs, which means difference in the degree of financial leverage between shari'ah and non-shari'ah compliant firms.
This research aims to study and analyze the degree of reliance on leverage between traditional and Shari'ah-compliant institutions by using a sample of the Malaysian economic listed firms.
